It’s Not Your Assessments That Will Increase Your Property Tax Bills…

It’s  entertaining watching politicians working overtime to protect us by focusing on (Pick One):

A)  Rising Property Valuations

OR

B)   Making sure they start the Property Tax discussions with the Roll-Back Millage Rate

Which do you feel is the most critical part of this upcoming issue regarding YOUR property taxes?


There has been nothing but finger-pointing over the Fulton County Property Tax debacle.  And rest assured it will get worse before it gets resolved.

It’s NOT the Tax Assessors that will raise your property taxes.    The property values of everyone in Johns Creek could rise by 300%.  Your taxes could stay approximately the same.

As a Johns Creek property owner, it’s these three government bodies that will decide to raise your property taxes or not, and NOT the Tax Assessor.  They are:

Your Fulton County Commissioners (Seven Members)

Your Fulton County School Board(Seven Members)

Your Johns Creek City Council(Seven Members)

Regardless of what the assessments are, the ball is in the hands of the majority of these three groups(21 people) mentioned above. Which is why I am confused as to why they talk about a problem with A above when they can eliminate that issue completely by focusing on B.   While I know that it takes a simple majority of the Johns Creek City Council to set the millage rate, I will need to confirm that the Fulton County Commission and the Fulton County School Board also require simple majorities.

Like me, you may have thought you understood how this process worked.  You own a piece of property in Johns Creek and Fulton County.  Every few years, your property would be re-valued to reflect current market conditions, and then your property taxes would rise.  That is the way it seemed to me.

For many folks with mortgages, the property taxes are embedded in their monthly payment.  And so the increases(or decreases) are mostly hidden from view.  I thought if my values go up, I will pay more.  If they drop, I will pay less.  And while it sounds right, there is a lot more to this issue

We need to look at this issue from a slightly different perspective.  We are taxed as a group.  Johns Creek Property Owners, for example, are taxed as a group.  Each property owner contributes to the City’s revenue based upon the value of their property as part of the total of all the properties in Johns Creek, which is what is called the Tax Digest.

Tax Digest

The City receives a report giving them the information about what the total Tax Digest is for a fiscal year.  Then, knowing what revenues they want to extract from the property owners, they select a millage rate to apply to that tax digest.

This system is rather imperfect.  And if we had a Tax Assessor’s office that functions as it should, we could trust this process IF our governments started with the Roll Back rate each and every year.

Roll Back Rate

What is a Roll Back Rate?  It is the millage rate that would extract the same amount of tax revenue from the property owners in total this year as it did last year regardless of their values.

You might say “But they selected the Roll Back rate and my bill still rose”.  Yes that can happen if your property’s value rose relative to all the other properties in Johns Creek.  But if all properties are assessed on a periodic basis(once every three years for instance), the results should balance out over time as I demonstrate below:

Year 1: Your property value did not rise, and the roll back rate was selected.  Your property taxes will be slightly less than the previous year

Year 2: Your property value did rise and the roll back rate was selected.  Your property taxes will increase slightly from the previous year.

Year 3: Your property value did not rise and the roll back was selected. Your property taxes will be slightly less than the previous year.

 

This is how the process should work and how it was designed to work IF the assessments are done on a regular basis and are fair assessments.

 

However, Fulton County has bungled the assessments and this year it is likely that most if not all of our valuations will be rising.  Word is that they at rising 30% or so this year.

This does NOT mean that you will get a property tax increase of 30%.  You could.  You might.  It might be even higher if they raise your millage rates.  But that is up to the three groups I mentioned at the top of this blog.

 

If they select the Roll Back rate, things will be ok.  Our homes will have appreciated in value.  Our millage rate would be lower, and therefore our tax bills for our Local Governments will be the same overall.

So the responsibility here lies with our locally elected officials.  Will they take this opportunity to really stick it to us because they can(and blame it in the assessments).

It’s up to us to make sure that they do not.  And if they do, it’s up to us to take care of this issue during the next election cycle.

 


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